Next week, the Federal Reserve will meet. According to analysts from Danske Bank, continued Fed hikes should help EUR/USD revisit the 1.15 area again during the course of the autumn. “With the Fed set to stay on autopilot for now, US rates are set to stay a source of USD support. This should help cement the status of the dollar as a carry currency both in terms of the level of and the change in short-end yields.” “With the Fed still keen to continue the process of moving rates back towards ‘neutral’, it remains too early in our view for the FX market to price the Fed going on hold. This should help EUR/USD revisit the 1.15 area again during the course of the autumn.” “As the ECB is set to signal a first hike coming up at a time where the Fed could be looking to go on hold, a EUR/USD uptick will start to materialize. Indeed, it is when easing stops – rather than when hikes occur – that currency appreciation is seen, and vice versa.”

GBP/USD

The dollar rose against its rivals on Friday, as investors reined in appetite for emerging market currencies, while the pound racked up losses as the UK and EU reached an “impasse,” on a post-Brexit deal. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.40% to 93.84. UK Prime Minister Theresa May criticized the EU for rejecting her post-Brexit plans, citing it “unacceptable,” particularly as the bloc failed to put forward alternative proposals. May further claimed that the UK and EU were at an “impasse,” denting optimism for a post-Brexit deal agreement following recent reports that the EU were set to adopt a warmer approach to Brexit talks. GBP/USD fell 1.41% to $1.3075, eroding most of the week’s gain as the pair looks set to end the week roughly flat. Turkey unveiled a new economic program earlier this week to reduce its current account deficit, while South Africa’s central bank stood pat on interest rates Thursday.